Hearing resumed to strip casino’s license

Maura Kelly Lannan

Friday, April 15, 2005 | 9:23 a.m.

CHICAGO -- The Illinois Gaming Board's new chairman ordered Thursday that a hearing resume to strip the bankrupt Emerald Casino Inc. of its gambling license.

If the license is revoked, it could jeopardize the chances of a Mississippi-based casino company that bid on the license to open a casino it planned for the Chicago suburb of Rosemont.

Last year, the Gaming Board chose Isle of Capri Casino Inc. as the winning bidder for the license now held by Emerald. On Thursday, board chairman Aaron Jaffe said an investigation into whether that company is suitable to run an Illinois casino will be put on hold until the revocation hearing is done. He said the board lacks the staff to conduct that investigation while performing its other duties.

Jaffe also appointed Abner Mikva, a former U.S. Court of Appeals chief judge and congressman, as judge for the revocation hearing. Mikva also has served as chairman of a commission that investigated a deadly 2003 downtown Chicago fire.

The Gaming Board has been trying to revoke Emerald's license since 2001, over concerns about the company and possible mob ties in Rosemont, where Emerald had planned to relocate and build a casino. But the revocation hearing was put on hold after Emerald was forced into bankruptcy and while the state worked out a settlement with Emerald.

Last year, Attorney General Lisa Madigan announced plans to resume revocation hearings after the Gaming Board selected Isle of Capri's $518 million bid for the license even though it also planned to build in Rosemont. However, the Gaming Board did not have enough members to appoint a judge for the hearing.

Gov. Rod Blagojevich let the Gaming Board languish for seven months without a quorum while he searched for qualified appointments. He named five new members last month, three of whom were appointed immediately and two who will join the board in July.

Jaffe wants to move forward with the Emerald hearing because the state has lost about $500 million in revenue since 1997 when Emerald's owners closed its casino in East Dubuque and later decided to reopen in Rosemont.

"We have to get this matter over with -- one way or the other. We certainly cannot stand back and let hundreds of millions of dollars go down the drain because we're tied up with one particular license for seven or eight years," Jaffe said.

Mikva, 79, said he did not know when the revocation hearing would begin.

"I want to get it done as quickly as possible. I think that's in everybody's interests -- the people's interests, the parties' interests, the board's interests," he said.

If the license is revoked, the state could hold an auction to reissue the license to another casino company, regulators said.

Attorneys for Emerald and representatives from Isle of Capri did not immediately return calls for comment Thursday.

Rosemont attorney Robert Stephenson said a new casino would be located in Rosemont, regardless of whether Emerald's license is revoked, based on a decision by the Illinois Supreme Court last year. That ruling said state law required gambling regulators to renew Emerald's license and allow it to relocate to Rosemont, Stephenson said.

"They can still revoke the license of Emerald Casino, but even if they revoke Emerald as the licensee, the license will still be in Rosemont," he said.

Madigan's office disagrees with Stephenson's interpretation of that ruling and has said the casino would not have to be located in Rosemont.

Madigan said in a statement she was pleased with Jaffe's decision to appoint Mikva and to resume the hearing.

"The ultimate resolution could lead to the reissuance of the 10th casino license and generate additional, and greatly needed, revenue for the state," she said.